A key driver of productivity is ease of resource allocation. This column uses firm-level data for France to show that misallocation has a spatial dimension: resource allocation and the associated effect on productivity are related not only to firms’ characteristics, but also to the environment in which they operate. Denser commuting zones seem to offer a better match between employers and employees, leading to more productive firms.

The IMF’s latest World Economic Outlook points to weak demand and investment as the main factor behind the world trade slowdown. I argue that this conclusion is overblown and that the high-quality underlying work falls well short of explaining the slow trade puzzle.

Restoring fiscal austerity in Brazil is not an easy task since the government faces both exerts from privileged groups and constraints establishing minimum public expenditures on some bills. It could however be done without penalizing public services if their efficiency is improved.

IMF cuts global growth forecasts following Brexit vote. Paul Krugman has taken a different point of view by arguing there is no reason to worry in the immediate future. This opposition reflects clearly two different opinions on the short-term consequences of uncertainty.

European financial markets face a shortage of liquid assets. New regulations increase banks’ demand for liquid securities, mainly sovereign bonds, but the European fiscal rules constrain the supply of public debt. Further, the QE is draining bonds from the market. Some proposed forms of “Eurobonds” or new debt securities issued by European supranational organizations could solve this problem.

The idea that exchange rate volatility could be detrimental to international trade is widely accepted. Surprisingly, macroeconomic evidence on its impact on trade yields either small or insignificant effect on aggregate outcomes. This column suggests that the behavior of big, multi-destination firms help explain this puzzle.

This column evaluates the ECB’s monetary policy stance based on the concept of the “natural rate of interest”. Our estimation results reveal that the ECB’s asset purchase programme seems to be too accommodating since 2015.

The shift from the concept of an “international monetary system” to that of “global financial safety nets” is positive but, still, limited mostly to emergency liquidity assistance. The broader notion of an “international financial public order” including crisis prevention would be more suitable.

Dollar changes impact negatively oil prices most of the times, except when the dollar reaches particularly high levels. During these episodes of high dollar values, the relation between both variables turns positive.